The average rent in Britain is edging towards £1,000 a month, new research has by HomeLet has revealed.
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Typical rents increased 1.1 per cent in July to reach £925, up from £915 a year earlier, according to the HomeLet rental index.
It found that values rose in nine out of 12 regions across the country.
Where are the biggest increases in rent?
The biggest increases were in Northern Ireland, up 5.7 per cent compared to a year earlier, and in Scotland, up 3.6 per cent.
By contrast, average rents in London failed to keep up, acting as a brake on the wider national rental market.
Rental prices in the capital are down 0.6 per cent compared to a year ago. And July was the fourth successive month that saw a fall in rental values in the region.
Outside of London, only the South East and North East saw declines, of 0.9 per cent and 1.7 per cent respectively.
This means rental price inflation across the country, excluding London, is now running at a much faster rate of 1.6 per cent.
Are landlords feeling more confident?
The research suggests landlords are feeling more confident about increasing rents on their properties than they were in the Spring - but also that they remain aware of tenants’ ability to pay.
Martin Totty, HomeLet’s chief executive, said: “It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs. This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.
“At the same stage last year, the South East was the main driver of UK average rents. This time around it’s regions throughout the country leading the strengthening in rents.”
He added that, excluding London, the average UK rent for a private rental property has hit a new high of £769 a month, up 1.6 per cent on this time last year.
Predicting the future of the UK housing market is “very difficult”
Despite an uncertain future, Totty believes there is still money to be made in the private rental sector, compared to other forms of incestment.
“Whether the market has now found some equilibrium remains to be seen, but landlords at least will be grateful for even some short respite.” Totty continued, “Predicting where the market heads from here is very difficult given the number of competing forces impacting the sector, either already being felt or still being contemplated.
“We know housing stock for sale is in short supply and the Bank of England has expressed concerns about the ‘credit overhang’ and lenders’ resilience should economic activity start to slow.
“At the very least, these factors should not be unhelpful to the rental sector in the immediate future, encouraging landlords to stick with property owning as an asset class, with potential still to provide relatively attractive returns compared with alternative investment choices.”